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Basic Question 1 of 13
A consumer group wants to prove that average hospital costs are equal to or more than $931 per day. The group randomly samples 60 accounts and finds a sample mean of $950. The hypothesis test is at an a-level of 5% and assumes a σ of $50. If the decision is to reject H0: μ < 931, the conclusion should be that ______.
B. there is no evidence that the average daily cost of the hospital is more than $931.
C. the average daily cost of the hospital is equal to or more than $931.
A. the average daily cost of the hospital is more than $950.
B. there is no evidence that the average daily cost of the hospital is more than $931.
C. the average daily cost of the hospital is equal to or more than $931.
User Contributed Comments 8
| User | Comment |
|---|---|
| Yurik74 | Why not A? Ha would be MU more than 931, not equl or more??? Ot not? |
| bhuman | Look at the null hypothesis, its simply states that M < 931. In that case, the alternative hypothesis, which we accept, covers both = and > |
| jpducros | I thought Ho always included the = sign, being either >= or <= Can someone confirm? |
| SKIA | jpducros -- that is not correct, in a two tailed test Ho does not need to have an equal sign. For example John thinks Jenny is a 5 on a scale of 1 to 10. Therefore the H1 = Jenny is a 5 and the Ho is Jenny is <5 or >5. |
| sgossett86 | I think JPDUCROS is saying that he thinks (and so did I) that H0 includes the equal sign in any hypothesis "de facto". so H0=, or H0>=, or H0<0.................... And yes, i'm still wondering about this after this problem... It raises questions... |
| EMMADADA | I agreed with JPDUCROS. H0 should be included the one with an equal sign. The given answer contradicts what I have learned in any STAT course. |
| EMMADADA | I mean, the answer should be correct. But the explanation is weird. |
| wpaxtonn21 | ^^ yes the null should always include the equal sign. |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
explain hypothesis testing and its components, including statistical significance, Type I and Type II errors, and the power of a test
CFA® 2024 Level I Curriculum, Volume 1, Module 8.